How does one extrude an edge relative to the vertex normals?
select the boundary edge loop using Alt+Right click (if it doesn't select the entire loop, select everything with A and click on Select > Select Boundary Loop) :





expand the selection using Ctrl++ :





while the Pivot Point is set to anything else than Individual origins, use the Extrude Region (Vertex Normals) operator :





add to the selection the extruded face loop you don't need (the lower one) using Shift+Alt+Right Click and delete the selection :





select the edge loops between which you have a gap and bridge them (Ctrl+E) :





select everything and recalculate the normals with Ctrl+N :




You get something like this :